Gianni Paladini’s consortium has made an improved offer of around £30 million
for Birmingham City and is confident of completing a deal before the end of
the year.

Paladini and his group have returned with a second bid for the Championship club and were last night waiting for the green light from acting Birmingham chairman Peter Pannu to enter negotiations.

The former Queens Park Rangers chairman is fronting the bid and has told sources that he is hopeful of their prospective takeover accelerating over the weekend.

Birmingham's current owner Carson Yeung, who is facing money laundering charges in Hong Kong, would ideally want £40 million but Paladini’s party are believed to be the only ones showing a serious interest in buying the club.

Birmingham are facing a potential crisis in January if a sale cannot be agreed, with key players including England goalkeeper Jack Butland and winger Nathan Redmond likely to be offloaded to keep the club afloat.

But Paladini and his group - who could include Flavio Briatore - are determined to complete a buy-out and want to take Birmingham back to the Premier League.

New contracts for both Butland and Redmond would be on the agenda, while funds will be made available for the manager to make signings in the transfer window. It is uncertain whether Lee Clark, the current manager, will remain in charge if the takeover is completed.

Paladini, who lives in Solihull, attended Birmingham’s 1-0 win at Leeds last weekend and has been out of football since leaving QPR in November 2011.